Sunday, November 8, 2009
The banks will bleed the country dry
The banking sector must be overhauled as profoundly as in the wake of the Great Depression or financiers will "game the state" over and over again, the head of the Bank of England's financial stability arm has warned. The banks have capitalised on the implicit state guarantee for the financial system. This is the latest incarnation of efforts by the banking system to boost shareholder returns and, whether by accident or design, game the state. The fact that governments repeatedly bail out economies and banks following crises also undermines their pledges of "never again". What is now required is "a financial sector reform effort every bit as radical as followed the Great Depression."